Neutral, uncommitted politically. Both conservatives and liberals are both at fault. He's an "equal opportunity criticizer."

What two ideas to take away from book?

1. Job crisis is permanent.

2. There are things we can do about it.

Three things we can do about it [Note: Conversation digressed, and #2 and #3 were not mentioned.]

1. We can start a WPA style project. It will never be cheaper in labor and materials than now. Would act as economic stimulus. Bridges, roads, buildings, communications (high speed internet, not high speed rail). Paid for by programs we don't need anymore (without unemployment compensation. Each point costs $400 billion a year. Workers would be paying taxes.) Elaine: Where does money to start come from? Jim: Start by locking Washington, D.C., people in conference center and don't let them out till they solve the problem. Discuss, negotiate, implement. Elaine: High school dropouts from Mexico. Not same significance as dropouts in America. But with immigration, problem is not at bottom end (they do jobs most won't do); illegal immigrants, using bogus Social Security, give up benefits. Most work too hard to commit crimes. Elaine: Entitlements on backs of taxpayers. We subsidize food, rent, health care, so Americans subsidize those benefits. Vern: it was a travesty where employer furnishes hospitalization. Jim: We need to disconnect health care from jobs. We have no choice. It's killing American jobs. Health care costs are eating country alive. U.S. government pays more per American than do the governments of eight western, advanced countries that have health care for everyone. And American health care outcomes are dropping. We're 25th in life expectancy and infant mortality. Vern: A generation ago, we had more people in college pro rata, and now we're 15th. Do we have stupid leaders? Jim: No, we're focused on wrong things. Vern: Policy decisions? Jim: Some, but things are just hard to get done. Things are getting voted down; e.g., bridge from New Jersey to New York. Vern: We lack proper prioritization. Jim: Yes. Vern: That comes from a vision of leadership. Jim: Yes, we have to be able to work things out and negotiate. Clarence Page (a liberal) said, after Super Committee failed, we need to bring back the smoke-filled room.

Vern: Dysfunctional fed government. Jim: Yes, and it's strange that it happened because it was so beautifully cast. Vern: Why are we dysfunctional? Jim: Special interests. Reelection. Vern: President is now campaigning. He's been president for two years and hasn't started to govern yet. Jim: Every president, in their first term is like that. The original idea, when government was formed, was president and congressmen would be working people and go to Washington for a while and go back home to work.

Vern: Perry last night wants to limit time Congress is in session. Will Rogers said when Congress is adjourned, country is safe.

Elaine:Where do we tie health insurance? Middle class can't afford insurance. Jim: Health savings accounts, as in Germany. Elaine: Nationalism? Jim: Entire country is on HMO or PPO. With unlimited health care people can go to any private doctor or private hospital. Elaine: Who pays for startup? Jim: Medicare and Medicaid, more can come from other taxes. If people are healthier, they will be working more. [Transcriber comment: But ifyour thesis is that there will be fewer jobs, how will people be working more and generating tax revenue?] Elaine: Will doctors accept a pay cut? Jim: It's already happening.

Vern: Was in oblasts in Russia. Doctors get less money than truck drivers. Jim: Yes, and it always has been. But it would not be true here, though salaries will come down. Like defense contractors have a single customer, hospitals would get all money from government but would still be privately owned and would have to meet standards. Elaine: But that's in a world with no lobbyists. We know that people make millions of dollars to influence government. Jim: Lobbyists are legal. But politicians must be responsible for separating BS from intelligent information.

Vern: What is most significant chapter? What should people take away from it that makes a difference? Jim: Must realize how permanent job situation is and that it will get worse. Vern: We should have a recession every five years. Otherwise, you breed a generation of entitlements and an expectation that house prices will stay up. Jim: In Southern California about five years ago, median response to survey was that housing prices would go up 22% = $7 million for 3-BR house. People have been indoctrinated into how great it is to buy a house, but it is speculative, and they have a long way to drop.

Vern: What about recession every five years to clamp expectations down to reality? Jim: Not necessary, because our expectations in times past were better. In '50s, they were more modest, even without a recession. The end of the '60s spawned social stuff and '90s spawned bubble. I wrote the book only after the bubble burst.

Vern: What pushed you into writing? Jim: Times I was out of work in 2005 and 2008. Mainly it was just thinking about it. In fact, classical economics assumes there will always be enough jobs, barring some bad times. That it has always happened doesn't mean it always will happen. Automation, etc., means it won't happen.

Vern: When I have guests on from Congress, I asks, "Why do you hate your grandchildren?" Jim: Laughs. Vern: What they're doing is charging on their grandkids' charge card and mucking up their life. Jim: True. Average person on Medicare and Social Security starting at age 65 costs $1 million.

Vern: We should do a book collaboration: What plan do we use to make our federal government function again? Jim: Both sides are intractable. Elaine: Republicans call it "core values." Vern: Any good country must provide for the less fortunate. But that shouldn't apply to immigrants.

Commercial break

Vern: Two things are driving this whole thing: globalization and technology. Jim: Yes. That's all you need to know about what is causing the drop. Vern: I've been to China five times. He's absolutely right, and when people realize that the deck has been shuffled and aces and queens have been removed, we must have new mindset. Jim: We must accept China as part of the world. Vern: Many think their currency is underpriced. Jim: Some do, some don't. But when their currency increased, they kept selling things. Their population is hugely bigger, so U.S. doesn't have to be #1. [Vern and Jim both speak some Chinese to each other.] Vern: You are doing God's good work. Jim: There is no audio version of it, but I may do that if the demand is high enough. The book came out Nov 14. Vern: Cover endorsement? Jim: Florida entrepreneur, Timothy Michael Ricke, read it and bought in to major idea.

Vern: Will public be sharp enough to come to same conclusion? Jim: Something like this always takes a while. It's been a 200-year historical change. In the 1500s, 1600s and 1700s most people didn't have jobs. It won't be going on much longer. There will be much resistance, but in ten years it will be obvious.

Vern: We have "public schools," which are government schools. How are we going to sharpen up with them? Jim: There is orthodoxy in schools. Vern: Union mentality. Jim: Low educational standards, dumbing things down. School system hung up with different groups. We are all Americans, and we need to solve the problems as a group.

Vern: We have a beautiful nation, with many resources, but we're mucking ourselves up. Jim: Yes. Vern: We are tripping ourselves up right and left because we have bad leadership. Jim: We need to start trading horses again. We need to solve or mitigate the jobs problem.

Vern: We have to figure out how to make the federal government functional again. Jim: Text of Obama's job act looks like it was written by Republicans: e.g., regulatory reductions, tax credit to employers. Yet Republicans rejected it en masse. They just said no. Vern: There are no consequences for bad leadership. Jim: Reelection rate of congressmen is 98%. Vern: Vote them out. Would send message of fear. Dick Lugar and everybody else. Jim: It is a lost art, but for various reasons it's not happening and is a core problem. They're so concerned about saying the wrong thing to their constituents that they don't take risks. Vern: They worry about the wrong things. Jim: Yes.

Vern: What can people do personally? Jim: 1. People need to adjust by getting work out of the center of their lives and realize that work is not going to be the central thing anymore. 2. We need to adjust our expectations. There is no divine right to have high income. People should have enough to keep going, eat, have shelter. We need to focus on what we need. A rule during his up-and-down finances: If I don't need it or really, really want it, I don't get it. Allows me to focus on what I really need. [Transcriber comment: That's been one of my mantras for years.]

Vern: Can we have success in a capitalistic system? Jim: Yes, but the time of free markets may be passing. If people cannot sell their labor, then people won't have money, then businesses won't earn, and then there will be fewer and fewer jobs. It's a truth of automation and globalization that not as many people are needed to produce goods and services.

Vern: In oblasts of Russia, I learned the communist system. Jim: The communist system is no good. Vern: Had an elite system. I could shop at [barioskas?] with hard currency along with [noblekotura?]. But in the common markets, there were 30-foot long cases in grocery stores with nothing in them except hard salami. Jim: And it was probably bad. Vern: I took a Russian friend to a big box store, and he was amazed. I took Bibles and a gross of condoms to Russia. Jim: It shows the criticality of incentive. Did you go to farms and collective plots? Vern: Yes. Jim: Did you see individual plots? Vern: Yes, in Estonia. Jim: Collective plots are terrible looking, and personal plots are beautiful. Vern: Because there's incentive. Jim: People would have the choice of a guaranteed income or working. Vern: In Russia, churches were made into museums, and birth control was abortion. Jim: That was a mess, a tragic and cumbersome way to deal with something.

Vern: If we don't figure this thing out, we're going to be like a feather in the wind. Jim: I don't advocate a state takeover of business. Vern: I have broadcast from Cuba. Was aware of what Cuba was doing. Stayed at Riviera Hotel in Batista days. Jim: In '50s. Vern: Cuba wants to promote free enterprise now. Jim: We would have a lot more free enterprise in America if we had a free health care service. Rate of entrepreneurs is low because of health care. Vern: Must divorce health care from employment. Jim: Yes. Vern: With globalization and technology we can't compete with a long chain on legs of free enterprise and must provide health insurance. Jim: Lee Iacocca said each car cost the company more in health insurance than steel; since then health expenses have quadrupled.

Vern: Unions? Jim: I don't mind unions, but their time in history has passed. They should not be mandated; they should not be the only way. Obama did one thing I disagreed with a lot: clamping down on workers leaving union and going to right-to-work states. Unions are now part of problem.

Vern: Was speaking to friend in Italy last night, in Tuscany. You have olives for olive oil and grapes for wine. Friend said that before electricity, they raised olives to get juice for lighting devices. Jim: Same with vegetable oil. Another way of using resources. Reminds me of situation here with biofuels.

Vern: Had blacksmith friend in Sioux City, Iowa. Jim: Such people exist, but you're not going to see them on every street corner.

Vern: We're at different level of employment now, and we're going to stay there and we must get used to it. Jim: Bad things will happen to this country if we don't realize it. A dark future is coming up if we think that every good person who wants to work can work.

Vern: What do you think of an apprentice system? I was an apprentice, and now I own several radio stations. Jim: A good way. Bruce Williams would always advocate that to learn a business. Vern: Now, with labor laws, if we offer apprenticeship (unpaid), might be cited for violating labor laws. Jim: Yes. I'd like to be able to do promotion: Let me work here free and if you like me, hire me. But that wouldn't work because of union requirements.

Vern: How is the book selling? Jim: It was just published last week, and I'm spreading word on radio stations. Vern: You're leading the curve. People will have a step ahead. Jim: Yes, they will. It is based about the future but also the present.

Vern: The world has shrunk because of communication and travel. Capital can go anywhere. Jim: The world is integrated. We can't be protectionistic. We can't say we can't import from other countries. Try to get a TV set not made in Far East. Protectionism kills innovation and kills jobs because other countries won't buy from us if we won't buy from them. Vern: We must be competitive in the world. Jim: Yes, but American workers are not competitively priced.

Elaine: Down to one minute.

Vern: We're lighting a candle, not cursing the darkness. Jim: To readers, if you think I'm full of it, let me know. Vern: PhD = piled high and dry. Jim: Applied management and decision sciences at Walden University.

Elaine: Thank you for being bipartisan: Jim: Both sides have good ideas.

800.660.6210.

Elaine: Have wonderful holiday.

Jim: Thank you Elaine, thank you Vern.

Vern: Did you learn anything today? Elaine: I learn something every day. I appreciated his attitude.